Yahoo Finance Live anchors Julie Hyman and Brad Smith discuss the decline in stock for AMC despite strong fourth-quarter earnings.

Video Transcript

JULIE HYMAN: Let's talk AMC. AMC shares are in the red despite the company beating analysts' expectations with revenue falling 15% year over year, but that was a smaller drop than estimated. The movie theater chain notes that the industrywide box office will not return to prepandemic norms between 2024 and 2025 at the earliest. So that could be one of the things, perhaps, that is holding back the shares, the fact that attendance is still not up to snuff.

But if you look at the revenue breakdown in the various areas-- admissions revenue down 16%, food and beverage revenue down 13%. You know, that is obviously problematic. Consolidated attendance down by 17% year over year.

BRAD SMITH: If there was a period for them to not just do well, it had to come off of the back of some of the best-performing titles that we've seen in history being able to have yet a new release. And I'm looking at it and thinking about "Avatar" and all of those that are in the world of Pandora. At the end of the day, what titles are going to be able to have that same type of strength?

And you have to look out into that schedule, and I think AMC having full insight into what titles, what content is set to be released-- oh yeah, and the competition that you're going to see with streaming platforms as well bringing those titles more quickly to streaming. It makes the decision that much easier for so many consumers out there. Do I just wait for this to come out on Netflix? Do I wait for this to come out on Paramount Plus? Do I wait for this to come out on Disney+? And that was the conversation people were having in movie theaters prepandemic anyway when they saw the previews rolling.

JULIE HYMAN: Yes. And then let's talk about AMC from a sort of financial-engineering perspective, right, and CEO Adam Aron, who has been so good at courting the retail community. Here's the APE units trading at a sharp discount to the AMC shares. These are the AMC preferred APE units. There is a hearing coming up in mid-March on March 14 about the conversion of these shares into the regular AMC shares, but that has really been an overhang.

This was a way-- effectively let's say this was a back way-- backdoor way for the company to issue more shares without getting approval from the company shareholders to issue more shares of its common stock, right? It's a little bit of a complicated financial engineering, and it seems like it's not a slam dunk here. Although Adam Aron has done a lot of things that have been smart from that perspective, this one it's unclear whether it's going to work out as he intended.

BRAD SMITH: Yeah, this perhaps the one ding on the extended term kind of financial moves that they've made. One of them that they did twice was just trying to bring in more capital. They did at-market equity offerings twice, I believe, during 2021 when so much of that fanfare was there for them to be able to capitalize in on being able to just add more capital to the coffers as well for the near term.